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Competition

PR(05)28: The EFTA Surveillance Authority publishes Report on regulation of the liberal professions in the EFTA States

19.7.2005

19 July 2005 

Following an inquiry into the regulation of professional services in the EFTA States, the EFTA Surveillance Authority has now published its Report. The aim of the inquiry has been to examine whether legislation or self-regulation by professional bodies restrict competition among lawyers, architects, accountants and other liberal professions.

The Report suggests that the overall level of regulation in the EFTA States is low compared to the EU States. However, the regulatory environments in the EFTA States do feature some restrictions, such as:

  • extensive ranges of reserved tasks;
  • price regulation;
  • advertising restrictions; and
  • limitations on form of business.

Some of the restrictions identified in the Report may be challengeable under the competition provisions of the EEA Agreement and could thus possibly be the subject of future enforcement action from the Authority’s side.

In the Report’s concluding remarks, the Authority calls the attention of the EFTA States and professional bodies to the issues raised in the report and invites these parties to conduct a review of existing regulation on a voluntary basis.

For further information, please contact: Mr. Hrafnkell Óskarsson, Officer, Competition and State Aid Directorate, tel. (+32)(0)2 286 18 55. The full text of the Authority’s Report may be found on the Authority’s website www.eftasurv.int.


Background information

Liberal professions

Liberal professions are occupations that require special training in the liberal arts or sciences. These include e.g. lawyers, engineers, architects, accountants and pharmacists.

The competition rules of the EEA Agreement apply to members of the liberal professions in the same manner as to any other economic activity. However, the liberal professions tend to be characterised by legislation or self-regulation by professional bodies that may restrict competition. The types of competition problems most commonly encountered in connection with regulation of liberal professions are restrictions of entry into the profession, price regulation, restrictions on advertising and similar business activities, and restrictions on the way in which businesses may be organized.

Regulation of this kind is often imposed in order to protect the public, the rationale being that due to the specialised nature of professional services, the buyers of these services are rarely in a position to assess their quality. Public interest in maintaining an adequate quality standard for the provision of particular services can also be a consideration, as well as the fact that a professional’s work may affect parties other than the buyer of the services. For instance, an inaccurate audit can cause injury to persons other than the buyer of the auditor’s services, e.g. investors or creditors.

The Authority’s fact-finding exercise

In April 2004, the EFTA Surveillance Authority decided to undertake an analysis of the present market situation and the existing professional regulations established by governments and professional bodies in the EFTA States. The analysis was based on a similar exercise in the EU carried out by the European Commission. The professions investigated were lawyers, accountants, pharmacists, architects and engineers.

Questionnaires were sent to professional organizations in the three EFTA States. The present report’s findings are based on the replies to the questionnaires, as well as commonly available sources of information such as statutes and regulations, web-based information, and comments received from the competition authorities in the EFTA States.




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